Gardner Business Index, Precision Machining: October 2016 - 48.8

The precision machining index inched up in October to its highest level since March.

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With a reading of 48.8, the Gardner Business Index showed that the precision machining index inched up in October to its highest level since March and its second highest level since February 2015. Even though the industry continued to contract, the index has clearly been on an upward trend since November 2015.

In October, new orders grew for the second time in three months. Production expanded for the second month in a row, which are the first two months above 50 for the production index since April 2015. While still contracting, the backlog index was at its highest level since March and has increased significantly since July. The employment index showed employment levels were virtually unchanged in October as the index reached its highest level since July 2015. Exports contracted at a faster rate, but the index was still above the average level of the previous 12 months. Supplier deliveries lengthened for the seventh time in eight months.

While material prices have increased since March, they have increased at a slower rate since June. Prices received decreased once again after increasing in September. Future business expectations improved notably for the second month in a row. The index was at its second highest level since July 2015.

Machinery/equipment grew in October as its index has trended up since June. Job shops were virtually flat for the second month in a row.

The Southeast region grew at the fastest rate in October and for the second time in three months. The West expanded for the second consecutive month. The North Central-West also grew for the second month in a row. The three other regions contracted, but have trended up for at least the previous few months.

Facilities with more than 250 employees have grown only once since March. While facilities with 100-249 employees contracted in October after growing in September, the general trend of the index has been up since February. Companies with 50-99 employees have expanded seven of the previous eight months. Shops with 20-49 employees expanded for the first time since March. Shops with fewer than 20 employees continued to contract, but the previous two months have seen the index at its highest level since September 2015.